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Find the price level next year if the central bank

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Reference no: EM132506547

1. In a certain economy, when income is $100, consumer spending is $60. The value of the multiplier for this economy is 4. It follows that, when income is $101, consumer spending is

a. $60.25.

b. $60.75.

c. $61.33.

d. $64.00.

2. Depreciation of a currency is

a. the increase in the value of one currency in terms of another.

b. the decrease in the value of one currency in terms of another.

c. an arbitrary increase in the value of a currency that had previously been fixed in value.

d. an arbitrary decrease in the value of a currency that had previously been fixed in value.

3. Consider a hypothetical economy X. This year's money supply is $500, nominal GDP is $10,000, and real GDP is $5,000. Assume that the velocity of money is constant and the economy's real output of goods and services rises by 3% each year,

a. Find the price level next year if the central bank keeps the money supply constant.

Reference no: EM132506547

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